Uganda's Ambitious Budget for 2024/2025 Aims for Economic Growth Amidst Mixed Reactions

26 October 2023
Nile Post (Kampala)
By Catherine Nakato

As Uganda prepares for the financial year 2024/2025, the nation's budget is poised to pivot towards key sectors such as industry, services, and agriculture.

The strategy, outlined by the Acting Director of Budget at the Ministry of Finance, Ishmael Magona, is rooted in the National Development Plan 3, with a primary goal of expanding opportunities and fostering economic growth.

While the budget for the current financial year, 2022/2023, stands at 48.13 trillion shillings, preliminary figures from the Ministry of Finance suggest that the next year's budget, for 2024/2025, will surpass this figure, reaching a substantial 52.722 trillion shillings.

Ishmael Magona emphasized that these figures are supported by several factors, with projections including 29.97 trillion shillings from domestic revenues, 0.028 trillion shillings from Budget Support, 4.12 trillion shillings from Domestic Financing (Domestic Borrowing), 8.88 trillion shillings from project support, 9.46 trillion shillings from Domestic Refinancing, and 0.29 trillion shillings from local revenue for local government.

Acknowledging the pressing need for youth employment and development, the Ministry recognizes that job creation will be a pivotal strategy to combat unemployment.

The overarching goal of this budget is to drive economic growth by at least 7%. This is to be achieved through a shift from raw-material-based industries to a manufacturing and knowledge-based economy. Additionally, the plan aims to enhance the business environment to bolster competitiveness.

However, the budget strategy has been met with mixed reactions. State Minister for Trade, Harriet Ntabazi, expressed concern, saying "The Ministry of Finance didn't budget for trade anywhere, and I am glad you noticed that Uganda traded at a deficit, with exports falling short of imports. After production and value addition, what's the next step?"

The successful implementation of this budget will require addressing potential risks, including inflation, exchange rate depreciation, and the global and regional surge in demand for petroleum products, among other challenges.

Uganda's upcoming financial year is poised to be a critical juncture in the nation's economic trajectory. As the budget is debated and refined, it will determine the path towards a more prosperous future and the nation's ability to navigate through complex economic challenges.

Read the original article on Nile Post.

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